McGinn kept arena proposal secret from city council for months

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SEATTLE -- Seattle Mayor Mike McGinn is a huge supporter of the proposed Seattle sports arena, and he is wiling to keep secrets to make it happen.

The Problem Solvers have learned McGinn intentionally hid hundreds of thousands of dollars in no-bid consultant contracts on the arena and other projects during his tenure in office. McGinn said he did what was best for the city, especially with the arena.

"It was my duty as mayor to treat that with the appropriate level of confidentiality," he said.

McGinn has preached an era of transparency when he took office in 2010, but he said he felt the arena was something that needed to be kept behind closed doors.

"You know, sometimes you need a little space to develop a proposal," he said.

The Problem Solvers filed a public records request to see the 16 contracts approved by the mayor's executive staff since he came into office. Those include the recent deals with Stafford Sports.

Under the city charter, contracts do not have to go up for bid if their value is $44,000 or less. In such cases, they are called “direct selection."

If contracts are worth more than $44,000 but still less than $260,000, every city department can deem a consultant a "sole source," meaning he or she is the only option for the task. It is still a no-bid job.

No bidders means no leaks; deals can stay quiet. McGinn used this option five times in the last two years.

McGinn wanted an expert in NBA arena financing to help structure the current deal. But he split the contracts into three separate deals so they could stay under the radar. Two contracts were worth $39,000 and deemed direct selection. The other $58,500 contract was sole source. All three had no bid and no one at city council knew.

Nancy Locke with the city’s contracting division says the charter allows McGinn or any department this latitude. She says no-bid contracts are common practice.

"The departments are the ones who make the decisions,” she said.

Locke also explained city rules do not require a deadline to file the contracts with the clerk. That means contracts could be signed and kept hidden from filing for months, or even years. That clause allowed the Stafford deals to be intentionally kept secret.

McGinn hired Stafford Sports in early July 2011, but his office did not file the contracts until seven months later. By then, most of the money had already been spent, and barely anyone at City Hall knew.

"As far as the mayor picking up the phone and talking to me or talking to the other council members, I don't think it happened," said Seattle City Council member Nick Licata.

Licata, who said he is not happy with KOMO's findings, said he is personally bothered that the mayor kept so many secrets on such a huge proposal.

"That certainly violates the spirit of transparency," he said.

The mayor said his plan deliberately helped arena developer Chris Hansen to buy the arena property in SoDo at fair market value.

"If we'd advertised his ability to acquire property, the arena would be very, very difficult," he said.

Public sale records show the United Warehouse property at Occidental and Holgate had a taxable value of around $19,000,000. Hansen's group purchased it for $21,000,000 in December 2011.

The owner had no comment for the Problem Solvers, but McGinn worried that if the owners knew what Hansen wanted to do with the land, the price would have been higher. He believes secrets helped Hansen save millions.

"What we know if that we'd advertise that, an existing property owner would have held the whole deal hostage," said McGinn.

The mayor added the secrets earned the city a chance at getting the Sonics back.